Michael Cook on the Bloodhound Blog wrote a helpful entry today on saving money on your mortgage. Simple financial truths are sometimes so obvious they're overlooked. Michael does a good job of reminding us to get back to basics. He has 5 easy to follow suggestions to save money on your mortgage.
Although Michael didn't mention it, having a system to reduce your indebtedness is always a good plan. One of his suggestions was to pay off higher interest debt first. Instead of putting money in savings at 2-3% interest, using that extra money to pay off a credit card that's costing you 10-14% will actually keep you from paying 8-11% interest.
A speaker once gave similar advice in a seminar. His hint was to use your discretionary money to pay off the highest interest rate credit card. Once that card is paid, add that payment amount to the discretionary money and use the total to pay the next highest interest card. When the second card is paid, that payment amount is added to the previous to continue the debt reduction. It was a simple solution, but made a lot of sense. Especially if one is like me, where I like to see progress toward the big goal by meeting little goals along the way.
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